Up to March this year the government had already repaid Sh173.11bn it owes the Public Service Pension Fund (PSPF).
According to SSRA Public Relations Officer Sarah Kibonde, the government had injected Sh2.6 trn in PSPF as non-cash bond with a 6.5 per cent interest rate.
She said in a statement that; The non-cash bond is expected to mature at different times to enable the social security fund to meet its demand, including paying the benefits.
The times for non-cash bond to mature differ from year to year, including those after three years and 10 years.
The regulator says they have started to address various challenges facing members of social security schemes.
She said most pension funds were now paying benefits to their members on time, adding that the authority had started to take stern measures against those who delayed collection of monthly contributions from employers.
Stock market experts say the new bonds will be a boon to the nascent sector in the country. According to the CEO of Zan Securities, Raphael Masumbuko, non-cash bonds are bonds usually issued by governments to institutions as settlement of debts it owes them.
He was quoted by this paper as saying that the bonds are issued when a government does not have enough cash or doesn’t want to give immediate cash. He also said that the new securities will improve the liquidity of the secondary market (stock exchange) if floated by changing hands.
“The bonds are important to the recipients because they can decide to discount them in the market if they need immediate cash or they can wait until maturity,” Masumbuko said.
The actuarial assessment conducted by the International Labour Organisation (WHO) indicated the National Social Security Fund (NSSF) and PPF Pension Fund (PPF) could remain stable by 2085 and 2075, respectively.
While the life span of Local Authority Pension Fund (LAPF) and Government Employees Pension Fund (GEPF), is estimated to reach beyond 2058 and 2047 respectively.
If there is a serious review of the criteria applied in calculation of benefits, then these social security funds are bound to reach 2085,” it said.
The statement explained that the lifespan after retirement has gone up to 20.8 to male pensioners and 22.2 to female pensioners and that in 50 years to come, it is likely to go up 22.9 to male pensioners and 24.9 to female pensioners.
“The pension rate has been improved to 72.5 per cent from the average of 67 per cent in previous years,” it said.
The statement said the government has agreed to clear all debts to other social security funds namely National Health Insurance Fund (NHIF), GEPF, LAPF, NSSF and PPF.
It added that NSSF had paid its beneficiaries, who had withdrawn from the fund, by 85 per cent, further saying that SSRA plans to introduce unemployment insurance benefits to meet the challenge of those who still withdraw from the fund.
“The insurance will be helping the people who become jobless to sustain themselves while looking for job,” the statement observed.
It further said that SSRA had started preparing regulations to trim down operational costs to the social security funds and that the funds would not be allowed to spend over 10 per cent as operational costs by July, this year.